There are two separate questions in home insurance and they get run together. The first is whether an insurer will cover the property at all. The second is what it costs. Rating factors are what most people read about; underwriting is what decides whether you get to the rating stage.
The four systems that decide most cases
These are the items a four point inspection reports on, and they are where most declinations originate. See home inspections insurers ask for.
Roof. Age, covering material and condition. Many insurers have a maximum roof age for new business, sometimes different by covering type, and several will write only on an actual cash value basis for roofs past a threshold. See roof age and roof claims.
Electrical. Panel type and capacity, the wiring method, and evidence of unpermitted work. Certain older panel brands with documented defect histories, knob and tube wiring, aluminum branch circuit wiring and fuse boxes are common eligibility problems. Amperage that is inadequate for a modern household is another.
Plumbing. Supply piping material and the age and condition of the water heater. Polybutylene and galvanized steel supply piping are the two materials most likely to cause a problem, both because of failure rates and because of the water losses that follow.
Heating and cooling. Age, type and condition. Certain heat sources draw specific attention, including wood stoves, pellet stoves, space heaters as a primary source, and oil systems with buried tanks.
Exterior and site conditions
Insurers order photographic exterior inspections routinely, often after binding and without notice. What shows up in those photographs matters.
- Visible disrepair, including damaged siding, missing shingles, peeling paint and rotted trim
- Debris and stored materials in the yard
- Trees overhanging or touching the roof, and obvious dead wood. See when a tree falls
- Damaged or missing steps, handrails and walkways, which are trip-and-fall exposures
- An unfenced or unsecured pool, a diving board or a slide
- A trampoline, with or without a net
- Deferred maintenance generally, which correlates strongly with future claims
Several of these are liability rather than property concerns, and they are covered in home liability: pools, dogs and trampolines.
Liability exposures on the property
| Exposure | Common underwriting response |
|---|---|
| Swimming pool | Fencing and gate requirements; diving boards and slides often prohibited |
| Trampoline | Frequently excluded from liability, sometimes an eligibility problem |
| Certain dog breeds or a bite history | Exclusion, surcharge or declination, and rules vary by state |
| Home business with client visits | Requires an endorsement or a separate policy. See running a business from home |
| Rental or short-term rental use | Requires a different form. See short-term rentals |
| Farm animals, horses, exotic pets | Often outside a standard homeowners program |
| ATVs and off-road vehicles | Generally excluded off premises; separate coverage needed |
Some states restrict what insurers may do about dog breeds specifically. Your Department of Insurance is the authority on that.
Location and catastrophe exposure
Much of the eligibility question is decided before anyone looks at the house.
Wildfire. Brush scoring, defensible space, access road width and roof and vent construction. In high-scoring areas the standard market may not write at all, leaving the state FAIR plan or the surplus lines market. See wildfire risk and FAIR plans and admitted versus surplus lines carriers.
Coastal wind. Distance to the coast, elevation, construction and opening protection. Percentage hurricane deductibles are standard, and binding moratoriums apply as storms approach.
Flood zone. A standard policy excludes flood regardless, but zone designation affects lender requirements and sometimes the insurer's appetite. See flood insurance and the NFIP.
Hail and convective storm frequency, which drives roof deductible structures across large parts of the country.
Protection class, meaning distance to a responding fire department and to a hydrant or water source. A rural property far from either is rated and underwritten differently.
The applicant, not just the house
Underwriting looks at the policyholder as well.
- Claims history, through reports that follow both the person and the property. Prior water and liability claims carry particular weight.
- Prior cancellation or non-renewal, and any lapse in coverage.
- Credit-based insurance score where state law permits its use, which several states restrict or prohibit.
- Accuracy of the application. A material misstatement discovered later can support rescission, which is a far worse outcome than a decline at the outset.
What to do when you hit a problem
Ask exactly what the finding is. "Declined" is not actionable. "Polybutylene supply piping" is.
Fix it and re-apply. Most four point findings are correctable. Replacing a panel, repiping, or replacing a roof changes the answer, and a corrected inspection report can reopen insurers that had declined.
Ask about a restricted alternative. An actual cash value roof endorsement, a higher deductible, or a more limited form is often available where a standard offer is not. On an older home, an HO-8 may be the route; see insuring an older or historic home.
Use an independent agent. Appetites differ enormously between insurers and change over time. An agent with access to several markets is the practical way to find the one whose guidelines fit your property. See captive agents, independent agents and buying direct.
Know the residual market exists. FAIR plans are the backstop for property that the standard market will not write. Coverage is usually narrower and it is a last resort, not a first stop.
Do not conceal the condition. It will surface, and the consequences at claim time are worse than the inconvenience now.
If you are buying a house
Get an insurance quote during the inspection period, not after. Roof age, wiring, piping, prior claims on the property and flood or wildfire exposure are all discoverable then, and they are all negotiable with a seller while the contract is still contingent. The full sequence is in buying your first home: the insurance timeline.
Underwriting guidelines, roof age limits, treatment of specific wiring and piping materials, dog breed rules, catastrophe appetite and permitted use of credit information all vary by insurer, by program and by state, and each insurer's filed rules and state law control. For your own situation, speak with a licensed agent or your state's Department of Insurance. You can also request home insurance quotes and get connected with licensed providers in your area.